In Ancient Athens, Rich People Bragged About Their Heavy Tax : The Indicator from Planet Money In the modern U.S. people may avoid or begrudgingly pay taxes. But in ancient Athens, wealthy people considered it an honor.

Grateful For Taxes

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

PADDY HIRSCH, HOST:

Hi, Stacey.

STACEY VANEK SMITH, HOST:

Hey, Paddy.

HIRSCH: So I have a question for you. It's tax time, of course.

VANEK SMITH: Yes.

HIRSCH: I know you've been sweating, laboring over your taxes night and day.

VANEK SMITH: It is tax time, yes.

HIRSCH: How do you feel about actually paying taxes?

VANEK SMITH: I mean, I don't know - stressed.

HIRSCH: But you don't actually mind paying tax in principle.

VANEK SMITH: In principle, no. In practice...

(LAUGHTER)

VANEK SMITH: In practice, it's different. But yes, in principle, happy to do my part.

HIRSCH: Good for you because did you know that in the United States today, an estimated 1 out of every $6 goes untaxed?

VANEK SMITH: Oh, this is, like, taxes are dodged, you mean?

HIRSCH: Well, tax loopholes - large corporations and wealthy citizens do everything that they can to lower their tax bill. And they end up paying as little tax as possible, so that's quite a lot goes untaxed in this country. But taxes otherwise have been with us for a very, very long time - very long time; certainly as far back as ancient Athens, which is, like, you know, 4- or 500 B.C.

VANEK SMITH: I mean, yes, they had taxes back then - taxes that fell largely on the wealthiest 1% of the population and believe it or not, taxes that those wealthy Athenian citizens weren't just willing to pay but kind of liked to brag about paying. It was like a status symbol.

HIRSCH: Status.

VANEK SMITH: I wish I felt that way about it. This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.

HIRSCH: And I'm Paddy Hirsch. And on today's show, we sail back in time to ancient Athens to learn about the taxes that people wanted to pay and what they got in return.

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HIRSCH: Thomas Martin is a professor of classics at College of the Holy Cross in Massachusetts, and I came across a piece he wrote about taxes in ancient Athens in The Conversation. And the piece had a pretty catchy headline - "Only The Richest Athenians Paid Taxes - And They Bragged About It" (ph).

So, professor, tell us a little bit about Athens in the 4th and 5th century B.C.

THOMAS MARTIN: Athens was, for the times, a really prosperous and large community. We think that there probably were up to 300,000 people or more living in the territory. You know, it's about 25 by 30 miles. And by the time we're talking about, Athens had been growing for, you know, a couple of centuries and had developed a pretty robust infrastructure for the time with large fortification walls to protect them from enemy attacks and especially to connect the city center to their international port on the sea, which was, you know, some five or six miles away and was the real heart of what was going to be their economic success as an international trade power.

HIRSCH: Yeah, I can imagine. And how did the city pay for all of this stuff?

MARTIN: Yeah. Well, they paid for it through a variety of income streams. From the information that we have, it seems like the most important streams were, one, the tax that they got from the commerce that went in and out of their port, which became ever more successful and, by the fourth century, was like a super-international success. And they imposed a tax on the value of goods going in and out of the port, of which a large amount was food. The Athenians had to import food just to stay alive, to feed the population, when early in the 400s, they discovered some really lucrative veins of silver ore in their territory. And for the next 200 years, they were leasing out the operations of the silver mines to private entrepreneurs who would then pay in return for the right to, you know, mine the silver and sell it. They had a tax on prostitution, which was not illegal. And they also put in fines as the penalties for losing in lots of civil cases, and so those are the sort of major income streams.

HIRSCH: So Athens clearly wasn't exactly a tax-free paradise.

MARTIN: Oh.

HIRSCH: But there was no income or wealth tax formally, which is a, you know, big difference with what we have in the U.S. today. But how did Athens pay for its defense?

MARTIN: It was the very richest Athenians who paid the bill.

HIRSCH: Really?

MARTIN: This is a form of taxation, if you want to call it that way. But the Athenians had a special word for it. And this is, I think, the key to understanding how they thought about this system. It was called a liturgy, which literally means, work for the people, a public service. And so based on your property holdings, if you were in what we would calculate the top 1%, then you were expected to, when called upon - and this would happen regularly - to pay the entire cost of provisioning, paying the wages and equipping one of these high-tech warships called a trireme for an entire year.

HIRSCH: Wow. Do you have a sort of a sense of the scale of the cost of that?

MARTIN: That could range all the way up to 6,000 days' wages, which is a considerable amount even for the rich. And you would be expected to actually command this warship...

HIRSCH: Wow.

MARTIN: ...While it was out on its missions, whether it's patrolling the seas to keep them safe or even going into battle, which was a scary proposition because the way these ships functioned was to ram the enemy ship.

HIRSCH: (Laughter) That's the very definition of a sunk cost.

MARTIN: Oh, you - absolutely. Talk about a negative externality, right?

HIRSCH: (Laughter).

MARTIN: Especially if you're the rowers because you're sitting down below decks - you're rowing backwards. You can't see anything. You're stacked three on top of each other, right? And people are, of course, literally scared so that they are loosing all kinds of body fluids on you, right? - because you're rowing as hard as you can to make this missile go as fast as possible to crash into the enemy.

HIRSCH: Dear, oh, dear - it reminds me of some trips I've taken in armored personnel carriers.

MARTIN: Those - literally right. You're right. That's a perfect analogy. And you don't know from one second to the next whether it's going to blow up in your face.

HIRSCH: Yes, that's not - that doesn't sound pleasant to me at all. But was there anything other than macho bragging rights that made paying these taxes worthwhile?

MARTIN: Oh, yeah. I mean, they took pride in it because of the status they could get but also because it literally brought them a life utility. What? - that is to say the respect of their fellow citizens that had actual, I would even say material benefits.

HIRSCH: Genuine social capital.

MARTIN: Very much so - I mean, it's from the society, but it is definitely capital, sometimes in a literally material sense. For example, if you were a rich person and you were brought into a legal suit to a civil case, you could, in your defense speech, say, when I performed my liturgy, when I was paying for that trireme or when I was paying for that dramatic festival to honor the gods, you know what I did? I paid more than I had to. And this established what? - your character as a good citizen who could be believed. And there is no open market where you could go buy that, right? You can't go buy social respect on Wall Street.

HIRSCH: No, indeed.

MARTIN: But as you well said, it was real capital that you could spend in the often contentious society that was this non-authoritarian direct democracy.

HIRSCH: If there was one thing that you would recommend as a takeaway from the Athenian city-state for us to pick up on today in the United States, what would that be?

MARTIN: It would be that serving the common good also brings individual benefits; that whether you're talking socially or economically, those two things can and should go hand-in-hand because in the long run, as history shows, unless people serve both the common good and their individual interests, there isn't much hope for long-term flourishing.

HIRSCH: That seems like a very fine point to end on. Professor Martin from Holy Cross in Massachusetts, thank you for joining THE INDICATOR today.

MARTIN: It's been a great pleasure. Thank you very much.

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HIRSCH: This episode of THE INDICATOR was produced by Emma Peaslee and Jamila Huxtable. It was fact-checked by Sam Cai. THE INDICATOR FROM PLANET MONEY is a production of NPR.

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